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Cheong Wa Dae Opposes Reduction of Corporation Tax Again

Cheong Wa Dae Opposes Reduction of Corporation Tax Again

Posted June. 12, 2003 21:25,   

한국어

As Cheong Wa Dae is putting the brake to the Ministry of Finance and Economy`s attempts to reduce the corporation tax in order to boost corporate investment, saying that benefits cannot be expected over a short period, whether the revision of related laws cannot be made by year`s end has become unclear.

"Even if the tax law was revised according to the ministry`s plan to cut the corporation tax, companies could benefit from the reduction three years hence," a senior official with Cheong Wa Dae said. "The reduction of the tax is not appropriate for revving up the current sagging economy."

"President Roh Moo-hyun has opposed the idea of reducing the corporation tax since his presidential campaign days. It is difficult to agree on it as it is not likely to help stimulate the economy," he added.

Kim Jin-pyo, deputy prime minister for finance and economy, who is a tax expert, is reluctant to depend on tax policy to resolve economic problems.

"It is more urgent to ease an assortment of regulations making corporate investment more difficult gradually, rather than reduce the corporation tax, which would favor mainly conglomerates. In particular, the president will focus on encouraging corporate investment by visiting companies," the Cheong Wa Dae official said.

Against this backdrop, the Finance-Economy Ministry`s plan to revise related tax law by the end of the year is likely to fail.

Responding to the recent National Assembly`s questions and meeting with reporters, the prime minister for finance and economy said that the schedule and scope for the reduction of the corporation tax would be decided after review on expert opinions and that the revision of related law would be made by the end of the year.



Young-Hae Choi yhchoi65@donga.com